Before an IRS Tax levy is placed on wages, bank accounts, tax refunds, etc., a Notice of Intent to Levy will be sent to the taxpayer, along with the individual’s rights to appeal the levy. If an individual does not respond in time to negotiate an alternate means of collection through any other IRS tax resolution strategy, such as seeking an Offer in Compromise, filing for Currently Not Collectible status, etc., the levy will be assessed.

The levy will then continue until the individual can accomplish one of the following. The easiest way to release tax levies is to pay the full tax liability, including interest and penalties. However, not all individuals have the luxury of deciding on the previous option, and must pursue other methods. Entering into an Installment Agreement with the IRS is one option, which entails the individual agreeing to pay the full liability in smaller payments over a prolonged period. It should be noted, however, that some Installment Agreements do not cause the IRS to release tax levies. Alternatively, an individual may file for Currently Not Collectible status after the levy has been issued, meaning that the IRS agrees that the levy is causing severe economic hardship. And finally, one may submit documentation to prove that, should the IRS release tax levies, the IRS could better collect on the tax liability.

In addition to actions an individual may take to fulfill or stop an irs tax levy, there are some circumstances that will see the levy released. For instance, if the statute of limitations expired prior to the serving of the levy, and the IRS is informed of this fact, then the levy will be dropped. Secondly, should the value of property being levied be greater than the tax liability, and releasing the levy on a part of the property could occur without affecting the ability to collect from the liability, then the levy will be released. This last circumstance is easiest to see in levies on bank accounts, from which the appropriate funds may be taken without continued seizure of the account.